Without any tax sovereignty of its own and faced with a substantial decline in the volume of "traditional own resources" (customs duties, agricultural levies, sugar levies), the European Union is left with a very low level of revenue autonomy. The EU budget is financed primarily from national contributions by the member states. Hence, controversies are more and more likely to arise over the EU budget and, in the long run, the Union is at risk of being underfinanced. Moreover, there is a growing contradiction between the absence of EU tax sovereignty, on the one hand, and the intensified pace of European integration, on the other hand. Despite the associated increase of cross-border externalities (mainly environmental damage), no recourse is being taken to taxation at the European level as a steering instrument. Another point worth noting in this context is that EU funds are used to finance a range of "European public goods" and activities with positive cross-border externalities. This holds, in particular, for expenditure for research, education and the transport infrastructure, which is subject to decisions taken at the European level. With a view to fiscal equivalence, it would be appropriate also to collect the taxes required to finance such expenditure at the European level. Apart from that, any attempt to reform the EU's system of own resources should also be aimed at its simplification.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 79 (2006) Issue (Month): 12 (December) Pages: 893-910 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
Did you know? You can import bibliographic info in various formats into you bibliographic tool, or just into your word processor. See under "publisher info" on each abstract page.